Market Insider

Royal Caribbean shares sink after Q2 results; CEO sees no immediate Zika effect

The Royal Caribbean cruise ship 'Radiance of the Seas' is berthed at Canada Place on July 1, 2016, in Vancouver, British Columbia, Canada.
George Rose | Getty Images

Shares of Royal Caribbean Cruises dropped more than 6 percent Tuesday following the company's second-quarter earnings release.

The cruise line reported second-quarter earnings of $1.09 per share on revenue of $2.11 billion, compared to analysts' projections of $1.01 per share on revenue of $2.17 billion, according to a Thomson Reuters consensus estimate.

CEO Richard Fain joined CNBC's, "Power Lunch" to discuss the factors driving the revenue miss.

He said he believes bookings with Royal Caribbean have been shielded from current events like Britain's vote to leave the European Union or the presence of the Zika virus in Miami. Instead, Fain identified foreign exchange as the culprit for the company's light sales.

"More than half of our bookings are coming from outside of the United States, and in each market we price in the local currency. Sometimes the currency moves in our favor as it did in the first quarter, and sometimes it moves against us, as it did in the second and we managed that over time," said Fain.

Royal Caribbean shares have dropped more than 33 percent this year.